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Blockchain as Enabler for TUI

16.11.2018

The tourism industry, like many other industries, is in a state of constant change. On the one hand, it is a constantly growing market, so that not only the number of customers, but also the number of providers and agents is increasing. On the other hand, the industry is characterized by digitalization and technical innovations. An important aspect of digitalization is certainly the simplification of processes in order to process and offer the growing volume of products. While concluding paper contracts with hoteliers and airlines used to be the norm just a few decades ago, today non-digital contracts are rather the exception due to the quantity and processing speed.

Another aspect, however, is certainly the growth of the portfolio in order to live up to our claim of being able to offer our customers the best possible products in all our destinations worldwide. To do so, transparency about the market is required as a first step in order to answer the questions "Which destinations and hotels are there?” and “Which of those meet out TUI standard?”. In the second step, it is necessary to establish robust communication so that later bookings, for example, reliably reach the hotelier, the excursion provider or the bus transfer.

Today, both steps are fully IT-supported and equally dependent on it. Much is done via technical interfaces between tour operators, hoteliers, airlines and other partners. The number of connected systems and also the data throughput rate are constantly increasing, so that the tourism industry today already has a huge network of interfaces and is becoming increasingly complex. As a result, this requires a high level of maintenance and upkeep by all parties involved.

We at TUI have asked ourselves this question: What alternatives do we have from an IT point of view to reduce complexity? And visionary thought: wouldn't it be better to create a network in which everyone can participate, so that it can grow by itself without having to set up further interfaces? This is exactly where we see the possibilities of the blockchain as part of the answer.

In the TUI Blockchain Lab, we work on ideas and concepts to sustainably rethink the IT landscape. A good example of this is the "BedSwap" project, which has been in productive use since 2017. The aim of BedSwap is to exchange hotel contracts and contingents between the various TUI markets and thus provide a comprehensive view of the inventory. Starting with this internal use case, experience was gained and various ideas tested.

However, the correct use of the blockchain is a team sport. In other words, it thrives on the fact that many participants pursue a common or complementary goal - and not just within a group. Thus it is planned to create a consortium of different participants or even to use public chains in the long run. Nonetheless, this does not only bring advantages, but also risks, which have to be evaluated and compensated beforehand. After all, this step leaves the protected network and even parts of the logic in the form of Smart Contracts are made visible to all participants. For this reason, gaining experience in order to assess risks and opportunities is an essential part of this journey.

The development of Smart Contracts, however, is only a small part of the whole, so that other product teams with Java and Angular specialists are also in demand. Through the combination of smart developers, clever strategists, experienced architects and various idea providers from the different business units, we are rethinking TUIs IT to a certain extent.